The company said in a short statement on its website that its unaudited third-quarter net profit was T$3.9 billion ($133.17 million), down from T$18.68 a year ago. While analysts expected HTC’s earnings to fall, HTC did worse than what was expected.

"Before we turn more structurally positive, we would like to see its flagship models contributing a large portion of its business, as its strategy of reducing its number of models leaves it much in need of a hit model for 2013,” wrote Robert Yen, a Goldman Sachs analyst, in a research report quoted by Reuters.

While the company has been bolstered in recent years by selling Android phones and partnering with Google in legal battles against Apple, HTC has more recently bet its future on Windows 8 phones.

“HTC’s newly launched smartphones will not be a game changer for the company,” Richard Ko, an analyst at KGI Securities Co. in Taipei, wrote in a Sunday report yesterday (as quoted by Bloomberg). “Competition in the smartphone space remains intense across all segments. We believe Apple and Samsung will continue to lead on brand, distribution channel, scale, and cost.”

Cyrus Farivar
Cyrus is a Senior Tech Policy Reporter at Ars Technica, and is also a radio producer and author. His latest book, Habeas Data, about the legal cases over the last 50 years that have had an outsized impact on surveillance and privacy law in America, is due out in May 2018 from Melville House. Emailcyrus.farivar@arstechnica.com//Twitter@cfarivar

52 Reader Comments

The One X and One X+ look to be solid phones, but they lack the brand appeal of the iPhone and the marketing push of the Galaxy SIII.

If the rumors are true and HTC is about to release a 1080p 5" device they'd have something no one else could compete with. It would be heads and shoulders over the Galaxy Note II, which for some reason went down on resolution while going up in size, and doesn't have the newest gen of quad-core ARM chips the as-yet unannounced HTC phone is rumored to have.

I've always been surprised that Samsung is sooo far ahead of HTC when, IMO, HTC makes just-as-good-if-not-better hardware. Is it advertising? I don't watch much TV anymore, but at least a couple of years ago HTC had some pretty decent "HTC and YOU" ads where the HTC letters morphed to "YOU".

I've always been surprised that Samsung is sooo far ahead of HTC when, IMO, HTC makes just-as-good-if-not-better hardware. Is it advertising? I don't watch much TV anymore, but at least a couple of years ago HTC had some pretty decent "HTC and YOU" ads where the HTC letters morphed to "YOU".

Rambling here, but really, I don't get it.

A couple of reasons:

#1, Samsung has had the flagship models over the last couple of years. The galaxy S2 was without peer in the Android Arena for a long time, and HTC has been making tons of poorly configured phones that don't fulfill the desires of users. (removable batteries and SD card slots just to mention a couple).

#2 Samsung made the last several Nexus phones. They've gotten the true Android enthusiast to move to their segment with the Nexus S and Galaxy Nexus.

On a side note I had one of the HTC Desire HD phones, and while the build quality of the phone was very good and sturdy, it was also very heavy compared to other phones and lacked battery expansion capabilities due to its design - and it came with an utterly anemic 1200MAh battery that crippled its usefulness.

Compared with that Desire HD the Galaxy Nexus I currently have is superior in almost every way.

Well, that's totally predictable. HTC announced 9 months ago that they were dramatically cutting the number of models in their lineup. That means less shelf-space, which is a major driver of sales to the average (i.e., uninformed) consumer.

Look at Samsung, the world's largest phone manufacturer. They have 63 Android SKUs in the US market alone, and hundreds more worldwide. Coincidence? I think not.

I've always been surprised that Samsung is sooo far ahead of HTC when, IMO, HTC makes just-as-good-if-not-better hardware. Is it advertising? I don't watch much TV anymore, but at least a couple of years ago HTC had some pretty decent "HTC and YOU" ads where the HTC letters morphed to "YOU".

Rambling here, but really, I don't get it.

you'd have to look at the number of carriers that sell their products.that makes or breaks a company.

And in addition, Samsung has made their flagship phones available on all carriers where HTC's highly regarded (for the most part) One series are scattered among carriers, and not available at all on some (Verizon for example). I really wanted a One S, but I'm on Verizon, but by the time my contract is up and I can move to another carrier, the S will be getting comparatively old.

I've had phones by both Samsung and HTC, and in every way, I've found HTC's to be better built and had better software. It's sad to see them performing so poorly against the competition. They really need to get their phones available across carriers. Most people are more or less locked into their carrier for extended periods of time, and not making their flagship phones available on the largest US carrier (Verizon) is a huge mistake.

And in addition, Samsung has made their flagship phones available on all carriers where HTC's highly regarded (for the most part) One series are scattered among carriers, and not available at all on some (Verizon for example). I really wanted a One S, but I'm on Verizon, but by the time my contract is up and I can move to another carrier, the S will be getting comparatively old.

I've had phones by both Samsung and HTC, and in every way, I've found HTC's to be better built and had better software. It's sad to see them performing so poorly against the competition. They really need to get their phones available across carriers. Most people are more or less locked into their carrier for extended periods of time, and not making their flagship phones available on the largest US carrier (Verizon) is a huge mistake.

Excellent point about the carrier availability. The fact that the One X is only available on AT&T wasn't a smart move. I'm guessing AT&T made a tempting commitment to them for it, but that's not how you expand your brand. The One S is a good phone, too, but it's not available on all carriers, either.

The Samsung Software situation is similar to the rest of the Android carriers, you can't count on a usable lifetime of updates on any of their brand line phones, but you can clear that up by buying the Galaxy Nexus, which is an utterly excellent phone and you'll have years of software updates from Google.

Still, the Galaxy S3 nailed most of what people desire in an Android phone - nice design, wide availability, cutting edge speed and features, and user expandability in the storage and battery departments.

I've always been surprised that Samsung is sooo far ahead of HTC when, IMO, HTC makes just-as-good-if-not-better hardware. Is it advertising? I don't watch much TV anymore, but at least a couple of years ago HTC had some pretty decent "HTC and YOU" ads where the HTC letters morphed to "YOU".

Rambling here, but really, I don't get it.

I see AT&T ads that feature HTC phones but they are entirely forgettable. They need a bigger gimmick to rope people in. Samsung has done pretty good marketing themselves as the anti-iPhone.

Kinda sad. My day-to-day phone is still the Nexus One and I think it's still a fairly solid bit of kit, despite the limitations it has being an early Android phone before many were thinking of large screen sizes or internal storage capacity.

I think it's mainly looks. The onex seems to be a cool device but somehow the weird sculpted Form with the camera sticking out is wrong. The s3 is more let's say normal. People may like the weird car concepts at trade shows but in the end they buy the normal cars.

A sign of the continuing power of marketing. It's the only thing HTC is lacking. Their phones are as good as Apple's or Samsung's. Better than many of Samsung's actually, it would be a margin but I'd take a One X over a Galaxy S3. But HTC just doesn't have the marketing to back it up.

The HTC One X, what does that sound like, what does it even do? If you're not a gadget geek you've got no idea what to do with that. An iPhone, that's easy. It's iconic, easily recognizable. A Galaxy S? Not so good. But if you know that its a smartphone then you've got it.

I want a One X just sounds like a random letter and number. And where's their huge marketing campaign? Samsung's terrible ads are everywhere. But they aren't bad enough not to be somewhat effective. HTC has nothing. They need to replace their marketing department and they might get back into it.

I agree with many of the comments already put up. Not enough carrier availability, and basically excluding the biggest US carrier, and putting a flagship phone on one of the US' worst carriers. Plus the obvious slimming down of their product lines. And the lack of advertising, regardless of their "gimmick" to draw in new customers.

And that's without mention of their backing of WP8, regardless of their or MS' assurance of that future platform.

Its like some kind of "perfect storm" of not-so-good things snowballing....

I've always been surprised that Samsung is sooo far ahead of HTC when, IMO, HTC makes just-as-good-if-not-better hardware. Is it advertising? I don't watch much TV anymore, but at least a couple of years ago HTC had some pretty decent "HTC and YOU" ads where the HTC letters morphed to "YOU".

Rambling here, but really, I don't get it.

I see AT&T ads that feature HTC phones but they are entirely forgettable. They need a bigger gimmick to rope people in. Samsung has done pretty good marketing themselves as the anti-iPhone.

I think it certainly helps Samsung that the first two generations of Galaxy phones looked an awfully lot like the iPhone, too.

HTC has to clear out a lot of old, bad, karma before it can see any positive returns from it's current strategy. As a comparison, Apple did something similar in 1998 with a 4 quadrant product matrix but didn't really fill it out until the iBook in 1999 but didn't stop posting quarterly losses until Q3Y02, three years later, having posted another loss in Q4Y00 two years before.

There are two side to the "make their phones available to more carriers" argument.

The first, obviously, is that the phones have to be made compatible with those carriers. But the other side is that the carriers have to want to carry the phones. Often, as we know, phones are made to the specs of the carrier. So the manufacturer essentially asks the carrier if they're interested in the phone(s). If so, they then make the phone to work properly for that carrier.

But if the manufacturer makes a phone that's compatible without asking first, they may find the carrier doesn't want it.

I never liked HTC cause of the dismal battery life.Plus now they have made batteries non-removable and removed SD-card support.

I like the look of Sense though

My HTC Trophy has excellent battery life, the battery is removable and replaceable (with multiple capacity options as well as bigger back plates), and has either a 16gb or 32gb SD card (I can't remember which) which is also replaceable - assuming you don't mind voiding the warranty - with up to 64gb currently. With the exception of 4G and the screen - which I wish was bigger - my phone does not seem lacking by comparison to any other available right now in any way that matters to me.

I've always been surprised that Samsung is sooo far ahead of HTC when, IMO, HTC makes just-as-good-if-not-better hardware. Is it advertising? I don't watch much TV anymore, but at least a couple of years ago HTC had some pretty decent "HTC and YOU" ads where the HTC letters morphed to "YOU".

Well, that's totally predictable. HTC announced 9 months ago that they were dramatically cutting the number of models in their lineup. That means less shelf-space, which is a major driver of sales to the average (i.e., uninformed) consumer.

Look at Samsung, the world's largest phone manufacturer. They have 63 Android SKUs in the US market alone, and hundreds more worldwide. Coincidence? I think not.

Apple, the world's largest company, has a very small number of SKU's .

I was burned on my last two HTC phones. They refused to update them and I bought my next phone from another company.

This

and

HydraShok wrote:

...despite the limitations it has being an early Android phone before many were thinking of large screen sizes or internal storage capacity.

This, although at least they've improved on that front.. but without expandability

So they've lost the tech community by not offering updates and they've lost the battle in the retail community cause the competitors offer expandable storage (and therefore the possibility of an upsale, "would you like a 16Gb microSD card to go with your new phone sir? It's only $20 extra!").

From what I've seen from friends' phones over the last couple of years, is that a lot of the early Android sales were HTC. These phones weren't quite at the quality level of the iphones and thus the brand has suffered. By all accounts the One X is no longer trailing in quality, but the brand has been seriously tarnished.

It's going to take time to dig themselves out of a hole that they themselves dug. Having been a "me-too" race to the bottom hardware developer is something that is going to be very hard to throw off.

Was their current crop of hardware something noteworthy? I think so. But then they did their best to sabotage their own efforts -

1) Effectively borking the US release of their flagship phone (they should have started with the One X Plus, not the One XL)

2) Going back on their promise for a single flagship platform - sure, they started out with the One X and One V, but not half a year later and there's already the One X + and the XV, etc.

3) Effectively alienating their fanbase by releasing an incredible update to a phone not too long after release*

4) I'm still getting questions about my phone whenever I pull it out (wow, what is that) and it seems like their marketing has failed.

*Granted, some can see this as relatively common, but we're talking about a guts upgrade that essentially said "oh, hey, everything that was missing before that you really wanted but we said wouldn't come your way, well here it is". That burns me personally as I really wanted the 32GB quad core, but sprang instead for the dual core 16GB because it was my only option on contract. I can't be the only one burned by this.

What HTC needs to do, if they're going to succeed, is take this forecast at face value and stick to your guns. Folding immediately isn't going to save them.

One last word of advice which I think might win them the media more so than they already have? That new HTC One X Plus? Make it a Nexus device.

A shame. IMHO, HTC has the phone with the best form factor, the Rezound, whose 4.3" screen I admittedly find a hair too big, but which allows it to have a non-PenTile 1280x720 screen, giving the best pixel density of any smartphone. Unfortunately, their flagship One line of phones have decided to play the "Me Too!" game, giving them either the same XBOX HUEG 4.6"+ form factors like Samnsung's phones, or making their 4.3" phone have the lame qHD (960x540) resolution instead of full 720p, like Motorola's phones.

There's a hole here for those of us who want top-of-the-line Android phones that don't require 2 hands just to hold, much less use. They filled it in 2011 with the Rezound, and I hope they do it again. They need to make another similar phone and market the hell out of it, instead of making just another not-quite Galaxy S3. Also, for the life of me, I don't understand why they emphasized the Beats audio on the Rezound. Again, the Rezound has the best pixel density of any smartphone; when Apple had that title, they sure let us know, and they're not even into the spec wars. Why didn't HTC hammer that into our heads as well instead of a brand that is primarily known as a marketing term for "EQ with more bass?"

I tend to keep my phones for years and research heavily before purchase. If I did not, I never would have purchase an HTC. Reviews were fairly unimpressive and it only shined after significant research, which to my mind means insufficient marketing and hype.

- Top of the line resolution screen with none of that pentile cheating- Dual ghz processors and unlocked roms for upgradability- On Verizon with 4g lte - ice cream sandwich ready when purchased

EDIT - exactly as lvlln said - I passed by the rezound at least a dozen times before digging deeper because I could not care less about "phat beatzzzz" but care deeply about max screen for browsing.

Excellent point about the carrier availability. The fact that the One X is only available on AT&T wasn't a smart move. I'm guessing AT&T made a tempting commitment to them for it, but that's not how you expand your brand. The One S is a good phone, too, but it's not available on all carriers, either.

Isn't that what Samsung executed on brilliantly about 2 years ago with the original Galaxy phones, where it launched one for just about every carrier? Epic 4G, Vibrant, Captivate, Fascinate, Mesmerize - each sold with a "Galaxy S" prefix, thus "Galaxy S Fascinate", etc. That created enough name recognition in the Galaxy brand that Samsung could release the Galaxy S II unadorned by carrier-specific names, and can now market the Galaxy S III completely independent of carriers. (Think about those ads mocking fans lining up for the iPhone; there's no carrier branding or affiliation in any of the versions, print, television, web...)

Meh my HTC sensation beats a sg2 any day. The screen on that thing is horrible. And I got ics way, way before it did.

but I agree, they aren't marketing it. And the second rate phone the one s is for tmob

The Sensation is a great phone that got overshadowed by the beast that was the SGS2. Reviewers loved that phone. However I can see why some people avoid HTC. My sister has had at least 4 Sensations, all of them with battery problems. She probably think that I convinced her to buy a bad phone but I didn't. The Sensation got good reviews from most tech sites I visited. Most of the time when people on the internet mention the Sensation I hear only good things. So I tell her the only thing I can:"You just got bad luck."I told her to get the 8X when she can upgrade. Hopefully she will have better luck with that device.

Android is pretty much a commodity market at this point, not unlike the PC market; materially and functionally, all of these devices are alike. This leaves branding and price as the only real differentiators left for any OEM, and Samsung absolutely dominates in branding. HTC is then left at a severe disadvantage when the time comes for a consumer to make a purchasing decision, hence their continually declining market position.

Until HTC finds a way to meaningfully add value to the Android ecosystem above and beyond what other OEMs are doing, they're fucked. Bullshit like Beats Audio headphones and investing in OnLive ain't gonna cut it.

Plus it doesn't help that the HTC phones (AT&T ones anyways) are locked down. Samsung's phones don't have locked bootloaders. Unless you were lucky enough to root/unlock your One X before the 1.85 update, you are SOL. Even on the HOX forums on XDA, people are fleeing to the Samsung GS3.

HTC's phones feel wonderfully engineered, they are just heavy enough to feel like a solid piece of equipment and the components are usually of high quality. Samsung's phones feel like those fake phones you see on display at some places. If it didn't light up you'd think an S2 or S3 was an empty, flimsy plastic shell.

I loved my HTC Nexus One and got more than my money's worth out of the handset but I just couldn't find anything I wanted to buy from HTC when it came time to trade up. Thus I became the owner of a Samsung product and now that I'm used the larger size and lighter weight (an odd combination) I'm very happy with it.

I have an HTC device with Gingerbread for day to day use and its fine as a phone, though I agree with the comments about battery life being pretty average / not that great;

At the end of the day though, its just a phone and since I don't identify it as a "lifestyle choice" and I buy devices that suit my needs at the time. One thing about HTC devices is that they're all very "samey" with only moderate hardware and real estate improvements as you go up and down the range - for "fashion buyers" this, and the proliferation of Android over so many makers is probably not a strong selling point. Cosmetically they're okay in my mind, but at the end of the day it lives in a pocket, so, meh.

I'd probably buy another if it was what I was looking for when the current thing is up for replacement, but I'd also look at a Samsung or really, anything else if it did what I wanted and wasn't an iPhone.

Kind of looking forward to going full Microsoft with a tablet, computer, phone and console in the not too distant future so if the Phone 8 devices are any good I'll definitely look at them.

Yep, I agree with a lot of these posts... logically the One X was the top of the heap when it came out and in many ways still competitive with the Galaxy S III. But it didn't sell.

I've been aware of HTC's products since Compaq used HTC as the OEM for the IPAQ line of PocketPC's (WinCE) and was hoping that HTC could make the transition to become a major brand since they made solid devices. First with MS OSes and then later with Android... They seemed to be on their way in 2010... but then they hit the wall in 2011.

I guess it's just as important to have good marketing and have an "it" factor as it is to have a decent product. I think it's the same reason why the ZuneHD didn't sell like it should have based on its features and build quality... it lacked the "it" factor...

Throwing money at a marketing campaign doesn't guarantee results either... look at Microsoft with all the money that they put into the "Zune" name.

I hope HTC can survive, but will probably not unless they have a smash hit next fiscal year (and I honestly thought that the One X would be that hit) because they lack the cash reserves that the other also-ran players in the mobile device sector have behind them: LGE, Motorola, Nokia, etc. I fear that they'll be bought out by Microsoft to create the "Zune Phone" and be driven into the ground like Danger.

i had an HTC one X, one thing i found funny (this is coming from watching Samsung taking the Mick out of iPhone drones out side shops with big lines) every one thinks my HTC one X is an Samsung galaxy S3 and this is coming from jo public me fixing there pcs

i agree Samsung spamming a lot of phones out there makes users think i want that one mentality for most less tech savy users ( if they find iPhone is out side there price zone), with htc there are alot of crappy phones (but Samsung have them to just not as many)

main issue i have with mobile makers is most are not thinking about how long will the phone most think 5 hrs long enough under light use, i had the HTC one X and the htc desire before that Both of them needed bigger battery the HTC one x was better but at night it cheats as it turns off Wifi and moile data (even when on power) the HTC desire you had to have an Brick 2500 battery if you wanted to use 3g as it run down quite fast, why Samsung and HTC are not useful for me as i prefer not to be an iPlug user [needing to give it an boost to get to the end of the day],the fix is awaiting me is an Moto razr maxx, i just have to get used to the way moto does there layout on screen, mite not be the most popular make due to moto dropping there promises to upgrade to 4.x on not so old phones (as the maxx has 4.0 support but i guess never get 4.1 I am fine with that)

The best thing HTC could improve on is the shockingly awful interface software it supplies for the devices to connect to the PC. I dunno about anyone else, but I find syncing the device such a hit and miss affair that I don't even bother any more.

Plus it doesn't help that the HTC phones (AT&T ones anyways) are locked down. Samsung's phones don't have locked bootloaders. Unless you were lucky enough to root/unlock your One X before the 1.85 update, you are SOL. Even on the HOX forums on XDA, people are fleeing to the Samsung GS3.

This.

The World is not just the USA; there are at least 200 other countries, and most of them has no market for bundling phones with contract.

Samsung made it out really great outside USA because it's eminently hackable: No locked bootloader, (nearly) all of them easily rootable, source code provided sundry. In my office, for instance, at least half of the Samsung users are using custom ROMs. And nearly all of them (me included) flashed a custom ROM still well in the warranty period (thus rendering the warranty void, but nobody seems to care). And those who are currently unwilling to flash a custom ROM, are waiting until their last couple of months of their warranty period.

Samsung second-hand phones are also driving brand recognition, at least here in my country. People have no qualms buying them since the phones will either (1) get updates, especially the prior flagship models, or (2) have a gaggle of cusROMs in XDA-Developers.

Arguing the merits of a phone's hardware is pointless, IMO. Samsung already offered Good Enough™ hardware. The key point is: Samsung allows your phone to be truly yours, while HTC (at least, in the people's minds, due to the locked bootloader) only allows you to own a phone as they wanted it.